Investing.com - Shares in GoPro (NASDAQ:GPRO) sank in pre-market trade on Tuesday after Morgan Stanley downgraded the firm and cut its price target.
Specifically, these analysts cut their recommendation on the action camera maker to “underweight” from “equal-weight” while reducing the price target to $5 from the prior $9.50.
Although GoPro managed to return to profitability at the end of 2017, these experts think that that investors may be giving the firm “too much credit”.
Morgan Stanley admitted that its prior recommendation on the company was “too generous”, especially now that the holiday season is over and the firm cut prices on its latest HERO6 camera due to competition.
These analysts believe that the only way for GoPro to boost demand for its products is by improving the underlying software and that negative trends seen last year will likely weigh on products both this year and next.
Shares of GoPro (NASDAQ:GPRO) slumped 6.03% to $5.92 in pre-market trade Tuesday.